Feature Article

By Paul Carton
April 29, 2008

ChangeWave's recent Smart Phone Wars report showed a rapidly evolving two-horse race between the Apple (AAPL) iPhone and Research In Motion's (RIMM) BlackBerry - with second tier players like Palm (PALM) and a host of others being shoved to the sidelines.

To follow-up, we took a closer look at the features users love and hate about their iPhones and BlackBerrys as part of our March 2008 survey of 864 smart phone owners.

If you recall, our previous report showed consumer satisfaction levels were sky high for the two smart phone frontrunners - with Apple boasting a 79% Very Satisfied rating for its iPhone models and RIM garnering a highly respectable 54% rating for the BlackBerry.

But what is it about these two brands that have consumers so very satisfied?

First, we asked RIM BlackBerry owners. By an overwhelming margin they told us the feature they liked most is the BlackBerry's exceptional access to email (56%).

No other feature comes even close in terms of popularity. As respondent MBR29407 explains, "The email integration of the BlackBerry 8800 is probably its single best feature, but I am constantly amazed at the quality of the phone itself." NEW06507 adds "I like the seamless way my BlackBerry works with corporate email, and the way you can call a number from within an email by highlighting it."

BlackBerry owners also reported a few key dislikes, number one being the speed and quality of its Internet browsing experience (13%). A second major dislike was the size of the keypad (11%), with owners complaining that the keys are too small and cause too many typing errors. "The overlaid keyboard (two letters per key) and TrueType feature make my BlackBerry slow to type messages without errors," reported respondent PET91787.

Click here for additional likes and dislikes on the RIM BlackBerry

The Apple iPhone

By far the most lauded feature of the iPhone among owners is its seamless integration of a Phone, iPod and Internet browser (36%). As respondent DSL06271 puts it, "The feature I use most is the iPod, but it's the integrated whole that makes it so much fun to use. "

Respondent BOB04545 adds, "I love the iPhone. It is revolutionary. I love being able to jump on the Internet, send email, get maps, weather forecasts, instant message, and make phone calls."

The second most popular feature is the iPhone's touch screen interface, followed by its ease of use.

In terms of dislikes, there is no doubt about what iPhone owners hate most. It's the speed of the AT&T EDGE network. No surprise then that the number two criticism is the requirement to Use AT&T.

Users also expressed particular unhappiness with the iPhone's lack of copy & paste functionality.

Click here for additional likes and dislikes on the Apple iPhone

Mirror Mirror On the Wall

So now that we've briefly reviewed the evidence, which smart phone is the fairest of them all?

The answer is clear - both Apple and RIM dominate the U.S. smart phone industry and are in the process of overwhelming the competition.

Each has a super-loyal cadre of users that fervently support their phone brand - and each has extraordinary room to grow.

Today there are over a billion cell phones in the world, and our ChangeWave surveys have picked up a seismic shift occurring among U.S. consumers towards the high end smart phone market. In simplest terms, that's where the momentum lies.

And as consumers gravitate towards quality multidimensional cell phones - i.e., smart phones - our research shows both Apple and Research In Motion are the big winners. In other words, just as the Apple iPhone has captured the hearts and minds of its user base, so has the RIM BlackBerry.

RIM BlackBerry: While the Apple iPhone boasts some of the highest satisfaction rates we've ever seen in a ChangeWave survey, the bottom line for RIM owners continues to be, "If it ain't broke, don't fix it." Respondent PAN18809 demonstrates RIM's extraordinary hold over business users when he writes, "My BlackBerry enables one simple truth - work is something I do, not someplace I go."

RIM's enormous strength in our ChangeWave business user surveys (73% market penetration) strongly suggests they'll maintain momentum in their core market going forward.

Apple iPhone: For all its momentum, there are still some core issues iPhone owners want to have resolved - and first among them is 3G capability. According to the survey, that's the number one feature iPhone owners want integrated into the next generation of the iPhone (19%) - even more so than third-party software (18%), GPS functionality (15%) or E-mail integration (10%).

The same holds true among respondents who say they are interested in but haven't yet purchased an iPhone. One-in-four say they are holding out to wait for the next generation iPhone (14%) or for 3G network compatibility (11%).

That's great news for Apple - assuming that the next generation of the iPhone is 3G compatible. Stay tuned. We'll know in June.

But the bottom line in this horse race is Apple and Research In Motion are both giant winners. The rest of the smart phone manufacturers lose.

Jim Woods co-wrote this article.

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By Paul Carton
April 22, 2008

Many of us old enough to recall the 1970s TV show "The Six Million Dollar Man," know it was about a guy severely injured in a plane crash who was subsequently "rebuilt" in a high-tech, clandestine medical procedure costing six million dollars.

In the show, the main character's right arm, left eye and both legs were replaced by "bionic" body parts that enhanced his strength, speed and vision far beyond that of mortal humans.

ChangeWave's February survey of 148 doctors involved with "bionic" devices, looked at current and future demand trend for joint replacements, cardiac implants and other types of body repair and correction medical products.

"Bionic" Boomers

Today, when a limb or organ no longer functions as it should, one increasingly popular option is to replace it with a "bionic" device.

We asked our panel of doctors which types of devices will experience the largest growth in demand over the next 12 months. Little wonder, with the aging of the baby boomers, that one-in-two (50%) believe that it's Joint Repair/ Replacement devices.

"I'm old enough to remember the 1970s TV show The Six Million Dollar Man," said Tobin Smith, founder of ChangeWave and editor of ChangeWave Investing. "And while we aren't quite there yet in terms of bionic technology, the fact that many aging baby boomers are looking for knee and hip replacements translates into big gains not only for the technology in general, but also for the companies specializing in this sector."

ChangeWave Survey Shows Major Corporate Shift to Energy Alternatives

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By Paul Carton
April 15, 2008

There's a new standing order in corporate America and it goes almost exactly like this:

Be much more efficient in your energy usage.

A sea change is occurring in the way U.S. businesses view energy consumption, according to a March 24-28 ChangeWave survey of 1,400 respondents knowledgeable about their company's energy spending.

Nearly three-in-five respondents (57%) say their company is concerned about reducing energy usage, and these heightened concerns are leading to a transformational shift in corporate energy consumption - with an extraordinary 26% of respondents saying their company has used Less energy than normal during the past six months.

In comparison, only 16% of respondents say they've used More energy over this time period.

In a related finding, nearly one-in-four respondents (23%) report their company's spending on energy efficient products and technologies will Increase over the next six months - three-times the percentage that see a Decrease (8%).

By Paul Carton
April 14, 2008

The discounters are back in vogue as inflation rears its ugly head.

That's the verdict from ChangeWave's latest consumer survey, which shows a large-scale movement to discount retailers driven by skyrocketing inflation and an overall spending environment that continues to slow.

The ChangeWave survey of 4,735 consumers, completed April 7th, looked at spending for the next 90 days.

In a clear sign the economic downturn isn't over yet, this is the third-consecutive ChangeWave survey in 2008 showing a recession in consumer spending. However, the current survey does contain one small glimmer of hope - the actual rate of spending decline appears less severe than in either of the previous two surveys.

Better than two-in-five U.S. respondents (42%) say they'll spend less over the next 90 days than they did a year ago - 3-pts worse than our February 2008 survey. Another quarter (25%) say they'll spend more - unchanged from previously.

Going forward, however, the most disconcerting finding isn't just tighter spending; it's the huge and growing toll that inflation is having on consumers.

By Paul Carton
April 8, 2008

The world is worried about water - and investors are worried about water companies.

Midst mounting concerns over the scarcity and quality of the world's water supply, a recent ChangeWave survey of industry professionals found increased water project spending for 2008 - but not at the extraordinary levels of recent years. And troubles may lie ahead.

The February survey asked 147 respondents working in the water industry about project spending over the next 12 months, and two-thirds (67%) say they think spending will increase. But that's a 14-pt decline since our previous survey in June 2007.

Despite the decline these results are still relatively upbeat. But according to the survey there is a cloud looming over the water industry that could drive down the numbers - and its epicenter is in the U.S.

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By Paul Carton
April 1, 2008

The release of the Apple (AAPL) iPhone rocked the cellular industry last year, and some analysts are now asking if the pending release of Google's (GOOG) Android cellular phone operating system may have a similar impact.

The answer: Not likely.

According to a March 17-24 ChangeWave survey of 3,597 consumers, the smart phone industry continues to transform into a two-horse race between Research In Motion's (RIMM) BlackBerry and Apple's iPhone.

While RIM currently dominates smart phone sales among consumers, the Apple iPhone has had tremendous success and continues showing momentum in this market. Meanwhile, the longstanding woes of Palm (PALM) and its Treo are accelerating.

RIM's On Top, But Apple Is Growing

RIM (42%; down 1-pt) maintains its towering lead in smart phone market share, even as number two Palm (16%; down 2-pts) is maintaining its two year losing streak. Palm has now lost market share in seven-consecutive ChangeWave surveys dating back to October 2006.

Now within striking distance of Palm, the Apple iPhone (9%) continues to exhibit strong growth in the smart phone market - jumping 3-points since our previous survey in January.

Latest ChangeWave Surveys Show Slowdown in Personal Computer Sales

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By Paul Carton
March 25, 2008

PCs ain't selling like they used to.

That's the conclusion drawn from two recent ChangeWave surveys which show the economic slowdown is knocking back demand for personal computers. And our February surveys of consumers and businesses clearly show deteriorating PC sales going forward.

Over The Next 90 Days...

Only 8% of the 4,427 consumers surveyed by ChangeWave in late February say they'll be buying a laptop in the next 90 days - the lowest level of consumer laptop demand in the past 12 months.

The same trend was seen in desktop PC purchases, with just 6% saying they'll be buying one - also a low for the year.

Things weren't any better on the corporate side, where PC buying has also slowed precipitously. In February, only 73% of 2,204 corporate respondents said their company plans on buying laptops in the next quarter - down 4-pts from a year ago. It's the same pattern for desktops, with corporate purchases down 5-pts.

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By Paul Carton
March 18, 2008

Retail sales turbulence has slammed into the consumer electronics industry with a vengeance. ChangeWave's latest survey shows a sudden huge pullback in consumer retail purchasing on electronics by U.S. consumers - the largest one since we began measuring spending trends back in 2002.

The February 18-25 survey of 4,427 consumers looked at a range of popular gadgets in the consumer electronics industry, including digital cameras, iPods and video game consoles.

Only 19% of survey respondents say they'll spend more on electronics over the next 90 days compared to 33% who will spend less - an unprecedented sign of weakness in the consumer electronics space.

Consumer Electronics Trends: Hardest Hit Stores

Key electronics retail outlets will be disproportionately affected by the spending downturn, with Best Buy (45%; down 6-pts) and Circuit City (14%; down 3-pts) hit hardest. Amazon (16%; down 3-pts), Apple (6%; down 3-pts) and eBay (7%; down 2-pts) will also register declines in consumer retail spending.

Latest ChangeWave Corporate Survey Shows a Striking Downturn

"All roads indeed lead to Rome..." -- Richard Le Gallienne, poet

ChangeWave's latest corporate survey results are in and the findings lead to a clear, if less poetic, conclusion - the U.S. economy has already veered into recession.

The survey of 3,345 respondents working in U.S. companies - conducted February 27th through March 5th - reveals a sharp downturn in corporate sales projections for the 1st Quarter, along with a bearish outlook going forward.

Negative capital spending, reduced visibility, and an increase in canceled orders provide additional details of a U.S. economy that is clearly in recession. Here are some highlights:

1st Quarter 2008 Sales: Only one-in-five (20%) respondents now project that their company sales will come in Above Plan for the 1st Quarter - 8 percentage points less than the previous quarter. Another 30% report their company sales will come in Below Plan, 5-pts worse than previously.

Just how striking a downturn it is can be seen in the following chart, which shows the last four years of corporate surveys. Note that in the current survey (Mar '08) the percentage projecting Below Plan sales is higher than the percentage projecting Above Plan sales.

You have to go all the way back to 2002 to find a downturn of this magnitude in a ChangeWave corporate survey. Importantly, these results echo earlier ChangeWave findings pointing to a downturn in both corporate IT purchasing and consumer spending.

But there's more:

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Lately, there's been some skepticism on whether Garmin (GRMN) is ever again going to enjoy monster growth. The world's number one GPS manufacturer has seen its stock price tumble 60% in the last four months, and is currently still in freefall.

So what gives? Has the Street given up on one of its former high flyers? They've certainly got an excuse. Not only did Garmin's average unit selling price drop precipitously last quarter, but their CFO recently predicted it will drop another 20% in 2008.

Yet there's another side to the story which we've learned through surveying our 15,000-member expert research network. And what we've uncovered is that Garmin (GRMN) has now achieved near total domination of the U.S. marketplace.

During February we conducted two ChangeWave surveys on GPS - one on consumer GPS trends (n = 3,773) and the other on corporate purchasing trends (n = 2,013). Here's what we found:

Consumer GPS Trends

Our February 18-25 survey of consumers who own a GPS navigation device, showed Garmin with a 56% market share - an increase of 4 percentage points since the previous survey in January 2008. Garmin's percentage towers over its closest rival Magellan, which captured only 12%.

Going forward, Garmin (54%; up 5-pts) remains first on the map in terms of planned consumer purchases of GPS navigation devices for the next 90 days. TomTom is second with 8% (down 1-pt), and Magellan has fallen to third with just 4% (down 2-pts).

ChangeWave Survey Shows Continued Deterioration in Consumer Spending

In the old days, they'd cut off the heads of bearers of bad news. Hopefully, you'll spare me.

ChangeWave's latest consumer survey shows a continued deterioration in U.S. consumer spending trends with no signs yet of any bottom. And in a striking finding, the survey results suggest that the government's economic stimulus package is likely to backfire.

The February 18-25 survey of 3,773 consumers focused on spending patterns going forward. Here's what we found:

Nearly two-in-five U.S. respondents (39%) say they'll spend less over the next 90 days than they did a year ago - 5-pts worse than January 2008 and the worst reading in a ChangeWave survey since 2002.

Just 25% say they'll spend more - 4-pts worse than previously. But even more ominously, the decline in spending growth is occurring across all income levels - including "super spenders" who earn more than $150,000 per year.

We asked respondents who are spending less to tell us why. Topping the list, two-in-five (40%) pointed to Inflation - 4-pts higher than in our January 2008 survey and a full 10-pt jump from only three months ago (November 2007).

In another clear sign of consumer unease, nearly three-in-ten (28%) of those spending less say it's to save more money - up 3-pts since January.

BlackBerry Maintains its Top Spot Amongst Business Users

By Paul Carton
February 26, 2008

In a January consumer survey, ChangeWave reported that Research In Motion’s (RIM) BlackBerry was “continuing to take the smart phone market by storm.”

Now the latest ChangeWave numbers are in on the corporate side of the smart phone ledger, and once again the clear momentum winner is RIM.

As part of a February 11-15 corporate survey, ChangeWave asked respondents involved with IT spending decisions who the manufacturer was of the smart phones their company currently provides.

Nearly three-in-four respondents (73%) cited Research In Motion as the manufacturer of their company’s smart phone.

While the RIM percentage is unchanged from the previous survey in November 2007, RIM’s market dominance over arch rival Palm (PALM) has continued to expand.

New ChangeWave survey confirms U.S. business spending has entered a recession

By Paul Carton

ChangeWave's latest corporate IT spending survey points to a negative growth rate for 2nd Quarter 2008 – and the findings confirm that U.S. business spending has already entered into a recession.

The survey found nearly one-in-four respondents (23%) report their company’s IT spending will decrease (or there will be no spending at all) in the 2nd Quarter, 3-pts worse than ChangeWave’s previous survey in November 2007. Only 15% say spending will increase – an unprecedented 9-pt drop from previously.

New ChangeWave Survey Shows Why Solar Energy Keeps On Shining

By Paul Carton

"Keep your face to the sunshine..." -- Helen Keller

No matter where you look, alternative energy is the topic du jour. Driven by the economics of record-high crude oil, the spotlight is shifting to non-traditional energy sources, particularly solar.

But while solar stocks were some of the biggest gainers for much of last year, recently the segment has taken big hits - with several key leaders such as First Solar (FLSR) SunPower (SPWR) and Evergreen Solar (ESLR) down as much as 50% off their 52 week highs.

To find out what's going on with solar and the other alternative energy segments, we surveyed 182 ChangeWave Alliance members working directly in the industry. The survey was conducted December 18-26.

Where Does VMware Go From Here?

By Paul Carton

Virtualization software leader VMware (VMW) was one of the great stock stories of 2007, skyrocketing after its IPO and ending the year up 63%. But in an abrupt reversal, investors have pummeled the stock during 2008 - including a 33% plunge immediately after VMware's latest earnings announcement.

And yet, while the software maker's 4th quarter revenue did fall slightly short of Street projections, sales still rose 80% and earnings surged more than 150% - beating the consensus forecast by 2 cents a share.

Nonetheless, many analysts appeared spooked by VMware's revenue shortfall, citing fears of competitive pressures from rivals such as Microsoft (MSFT), Oracle (ORCL), Citrix Systems (CTXS) and IBM (IBM).

But are these competitive fears, and the resulting stock meltdown, justified?

To find out ChangeWave took a close-up look at the virtualization market - including the ongoing horserace between VMware, Microsoft and other key vendors. A total of 1,368 respondents involved with IT spending in their company participated in our January 2008 survey.

Here's what we found:

The Virtualization Horserace

We asked respondents which virtualization software vendor(s) their company utilizes (note that one-in-four said their company uses virtualization software or services).
Among that group, 58% said their company currently uses VMware software - 3 points more than in our previous survey in October 2007.

Survey Shows Explosive Apple Mac Sales and High Leopard Ratings

By Paul Carton

Nobody ever said Apple Mac users were a patient lot. But the waiting is over for the Leopard operating system - and judging by ChangeWave's latest consumer survey, Mac buyers found it well worth the wait.

To gauge the initial reaction to Leopard and to take a fresh look at the ongoing slugfest between Apple, Dell and Hewlett-Packard, we surveyed ChangeWave Alliance consumers the week of January 2-8. A total of 4,604 participated.

Here's what we found:

Apple Mac Sales Skyrocket
Past 90 Days: Consumer sales of Apple laptops (17%; up 3-pts) and desktops (16%; up 6-pts) took an astonishing leap over the holidays. The chart below shows just how dramatic a transformation in market share this represents for Apple.